National Council on Climate Change of Indonesia
Indonesian National Plan on Carbon Market
Development and the Joint Crediting Mechanism
Carbon Trade Mechanism Division National Council on Climate Change of Indonesia
National Council on Climate Change of Indonesia 2
1. Current situation of Indonesian emission reduction and carbon market
2. The Joint Crediting Mechanism in Indonesian carbon market context
3. The way forward for JCM
Presentation Structure
National Council on Climate Change of Indonesia 3
Current situation of Indonesian emission reduction and carbon market
Emission Reduction Targets
Source: DNPI, 2011 • Economic growth increases with GHG emission
• 7 years to achieve national commitment of GHG emissions reduction by 26% under BAU level in 2020 (up to 41% with international support).
• Emission reduction is not compromising growth (26/7 vision).
Sector Unilateral Supported
Forestry and Peat 0.672 1.039
Waste 0.048 0.078
Energy and Transport 0.038 0.056
Agriculture 0.008 0.011
Industry 0.001 0.005
Total 0.767 1.189
(in GtCO2e) Source: DNPI/2011
Lesson learned: • Market instruments such as CDM proved to be effective to spur
emissions reduction by industries: 212 projects approved by DNA, 131 projects registered, 28 projects issued CERs (9.15 million tCO2)
• Increasing interest and opportunity from voluntary carbon market
National Council on Climate Change of Indonesia 4
Indonesia highly considers further utilization of market instruments.
Indonesian strategy on carbon market development
Multilateral carbon market
Bilateral and regional carbon market
Domestic carbon market
• Indonesia as implementing country of Partnership for Market Readiness
• Depends on UNFCCC negotiation outcomes
• Need balance between robust and flexible methodology
• Cooperation with developed countries, e.g. JCM with Japan
• Could be an international carbon offset scheme
• Domestic voluntary offset: Nusantara Carbon Scheme under development
• Developing and trading in Indonesia
• Simple yet robust
• Could be linked to wider mechanisms
National Council on Climate Change of Indonesia 5
Joint Crediting Mechanism (JCM) Development Timeline
2010 - First informal
meeting on JCM
- 8 Feasibility Studies done
- DNPI as JCM focal point
2011 - First formal negotiation
meeting
- 23 Feasibility Studies done
2012 - 26 Feasibility Studies done
- Establishment of Indonesian formal negotiation team; Coordination Team
for Interstate Carbon Trade Negotiation
(TKPPKA)
2013 - Signing of JCM
cooperation
- Establishment of JCM Joint
Committee
- Pilot Project
- Next: Methodology, guideline, etc.
Establishment of Japan and
Indonesia JCM Secretariat
During 2010-2013, 57 Feasibility Studies have been done covering fields of renewable energy, energy efficiency, forestry/REDD+, transportation, carbon capture and storage, and agriculture.
JCM bilateral agreement is official as of August 2013
Indonesian and Japanese side have established “Joint Commitee” in October 2013.
Its role is similar to role of the CDM-Executive Board in the CDM system.
National Council on Climate Change of Indonesia
Highlights on JCM Negotiation to Agreement
• TKPPKA Secretariat - operational entity of Coordination Team for Interstate Carbon Trade Negotiation performs as Indonesian official counterpart in JCM negotiation
• TKPPKA is focal point in arrangement and negotiation of bilateral carbon trade cooperation
TKPPKA Steering Committee
Head: Coordinating Minister for Economic Affairs Members: 4 ministers and DNPI Executive Director
TKPPKA Organizing Committee
Head: Deputy Minister for Multilateral Economic Cooperation and Financing
Members: Directors from 8 ministries and bodies
TKPPKA Technical Team
Joint Committee
TKPPKA Secretariat
(also Indonesia JCM Secretariat)
National Council on Climate Change of Indonesia
JCM Secretariat and Indonesia-Japan Coordination Plan in JCM Management
Government of Japan
Joint Committee Japan
JCM Secretariat Japan
Joint Committee
Indonesia
Indonesia JCM Secretariat/ TKPPKA Secretariat
Indonesia
JCM Joint Committee
Communication
Government of Indonesia
Japanese Project Participant
Indonesian Partner
JCM Projects in Indonesia
New project proposal
Indonesian Project Participant Candidate
Highlights on the Implementation
National Council on Climate Change of Indonesia
Highlights on Implementation
JCM implementation in Indonesia will be managed under two independent secretariats: Indonesia JCM secretariat and Japan JCM secretariat.
JCM secretariat(s) may jointly:
Prepare draft methodologies;
Receive new initiatives from JCM projects participant candidates;
Monitor development of JCM programs, project implementation, sustainable development criteria and environmental integrity fulfillment.
Each side may separately or otherwise decided:
Develop environmental and sustainable development criteria and capacity building needed;
Monitor the development of JCM Feasibility Studies;
Facilitate project participants in project-based capacity building;
Establishes and maintains a registry, as developed by the Joint Committee;
Issue the notified amount of credits to the registry.
Joint Committee decides JCM rules, guidelines, and guidance for implementation. Joint Committee will consist of 15 government officials from Indonesian and Japanese side.
National Council on Climate Change of Indonesia 9
What we want to do through JCM implementation
• Support Indonesian and Japanese effort in reducing greenhouse gases emission and achieving target.
• Encourage low carbon development.
• Promote green investment and technology transfer.
• Encourage private and public sector participation through emission reduction projects.
• Catalyst for new carbon market mechanism.
• Achieve co-benefits such as improved environmental quality, enhanced capacity, increased employment, and developed MRV expertise.
The way forward on JCM implementation
What’s next? • Methodologies and guidelines development for the JCM implementation. • Sustainable development and environmental integrity criteria which meet
requirements of both countries. • Indonesia and Japan seek the possibilities of the JCM implementation under
UNFCCC. • Pilot projects to examine the whole process of the JCM cycles, starting 2013/2014.
National Council on Climate Change of Indonesia 10
JCM Feasibility Studies in Indonesia
2010-2011 No FS Title Sectoral Scope Study Entity Indonesian Partner Location
1 Feasibility Study of REDD+ Projects in Indonesia REDD/REDD+ Marubeni Corp. Central Kalimantan
2 Feasibility Study Report on Possibility of GHG Emissions Reduction through the prevalence of Geothermal Power Generation in the Republic of Indonesia
Energy Industries - Renewable Sources
Mitsubishi Corp.
3 Utility Operational Optimization (U-OPT) Energy demand Azbil/Yamatake
4 Efficient Utilization of Low Rank Coal introduction to Power Plant in Indonesia
Energy Industries - Non-Renewable Sources
Sojitz Corp.
5 Possibility and Effects of Introducing High-Efficiency Coal-Fired Thermal Power Plants in Indonesia
Energy Industries - Non-Renewable Sources
Institute of Energy Economics, Japan
6 N2O Emissions reduction by the diffusion of coated fertilizers for agricultural soils
Agriculture JCAM Agri South Sumatera
7 Waste Treatment Projects in Indonesian Cement Manufacturing Plants
Waste Handling and Disposal
Kawasaki Heavy Industries
8 Carbon Capture and Storage Carbon Capture and Storage
Arabian Oil
Feasibility Study reports under JCM program that has been reported to DNPI (through meetings, presentations, or correspondence)
National Council on Climate Change of Indonesia 11
2011-2012
No FS Title Sector Sectoral Scope Study Entity Indonesia
n Partner Location
9 Reduction of CO2 Emission and Enhancement of CO2 Sequestration REDD REDD/REDD+ YL Building South Sumatera
10 REDD+ Project through Preventing Large Scale Peatland Fire in the Central Kalimantan
REDD REDD/REDD+ Sumitomo Corp. Central Kalimantan
11 Gorontalo REDD+ Project with Safeguard Program REDD REDD/REDD+ Kanematsu Gorontalo
12 GHG Reduction Project through Forest Conservation in Peat Land in Central Kalimantan
REDD REDD/REDD+ Marubeni Ministry of Forestry
Central Kalimantan
13 New Mechanism FS for REDD+ in Central Kalimantan Province, Indonesia
REDD REDD/REDD+ Mitsubishi UFJ Research and Consulting (MURC)
Palangkaraya University
Central Kalimantan
14 Avoidance of Peat Aerobic Degradation by Peatland Rewetting and Rice Husk-based Power Generation Associated with Rice Production Increase in Jambi Province
REDD REDD/REDD+ Shimizu Corp. Sriwijaya University, PU
Jambi
15 Newly-Constructed Geothermal Power Generation Project Renewable Energy Energy Industries - Renewable Sources
Marubeni and Mitsubishi Research Institute (MRI)
PT Supreme Energy / GDF Suez
Sumatera
16 GHG reduction project according to the introduction of geothermal power system in the Republic of Indonesia
Renewable Energy Energy Industries - Renewable Sources
Sumitomo Corp.
17 Leveraging Bilateral Offset Credit Mechanism to Improve Efficiency of PLN’s Hydro Power Plants Through Rehabilitation
Renewable Energy Energy Industries - Renewable Sources
Toshiba and Recycle One
PLN West Java
18 Small hydro-power project in Indonesia Renewable Energy Energy Industries - Renewable Sources
Industrial Decisions, Inc.
PLN
19 Dissemination of High efficiency solar cells in Un-electrified areas Renewable Energy Energy Industries - Renewable Sources
E&E Solutions
20 New Mechanism FS for Energy Application of Wastes and Wastewater Originated in Processing of Agricultural Products in Indonesia
Renewable Energy Energy Industries - Renewable Sources
Chugai Technos Corp.
Sumatera
21 Indonesian State Palm‐oil Factory’s Industrial Waste Biomass Boiler Power Generation Project
Renewable Energy Energy Industries - Renewable Sources
Shimizu Corp. PTPN III Sumatera
22 Program organization research of Green House Gas emission reduction through highly-efficient Distribution Transformer (DT) introduction
Energy Efficiency Energy distribution Hitachi Metals
National Council on Climate Change of Indonesia 12
2011-2012
No FS Title Sector Sectoral Scope Study Entity Indonesian
Partner Location
23 Plant Energy Performance Improvement by Operational Improvement
Energy Efficiency Manufacturing industries
Yokogawa Electric Corp.
Pertamina Indonesia
24 Applying Coordinated Control Technologies in Utility Providing Facilities through Package Software
Energy Efficiency Energy demand Azbil Yamatake Corp Java
25 CO2 Emission Reduction in Power Plant by Steam Tube Dryer (STD) Energy Efficiency Energy Industries - Non-Renewable Sources
Tsukishima Kikai and Sojitz Corp.
26 High-moisture (low-grade) coalwaste heat drying project in cement factories
Energy Efficiency Manufacturing industries
UBE Industries
27 N2O Emissions reduction by the diffusion of Coated fertilizers for
agricultural soils Agriculture Agriculture JCAM Agri
PT ASTRA
AGRO
LESTARI TBK Riau
28 Eco-shipping for Coastal Cement Tanker in Indonesia Transportation Transport UBE Shipping and
Japan Weather Ass.
Indonesian
shipping
companies
29 Development of Mass Rapid Transit (MRT) System in Jakarta Transportation Transport Mitsubishi Research
Institute (MRI) PT. MRT
Indonesia Jakarta
30 Indonesia Sumatera SNG Project Carbon Capture
and Storage and
SNG
Energy Industries - Renewable Sources
Mitsubishi Heavy
Industries ESDM Sumatera
31 Carbon Capture and Storage Carbon Capture
and Storage and
SNG
Carbon Capture and Storage
Arabian Oil and
Marubeni Pertamina Java
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2012-2013
No FS Title Sector Sectoral Scope Study Entity Indonesian
Partner Location
32 Mangrove REDD+ Reduction of CO2 Emission and Enhancement of Carbon Fixation
REDD REDD/REDD+ YL Building Dinas Kehutanan Kab. OKI , PT. Yamamoto Asri
South Sumatera
33 Gorontalo REDD+ Model Project REDD REDD/REDD+ Kanematsu Panasonic Gobel
Gorontalo
34 GHG reduction project through forest preservation in peat land in Central Kalimantan
REDD REDD/REDD+ Marubeni
Ministry of Forestry, Mazars Starling Resources, Yayasan Puter Indonesia
Central Kalimantan
35 REDD+ for Conservation of Peat Swamp Forest, and Biomass-based Power Generation using Timber Mill Waste to Process Indigenous Trees derived from Conserved Forest
REDD REDD/REDD+ Mitsubishi UFJ Research and Consulting (MURC)
Palangkaraya University
Central Kalimantan
36 GHG Reduction Project through Countermeasures against Large-scale Peat Fires
REDD REDD/REDD+ Mitsubishi Research Institute (MRI), Sumitomo
Central Kalimantan
37 Prevention of Peat Degradation through Groundwater Management and Rice Husk-based Power Generation
REDD REDD/REDD+ Shimizu Corp
Ministry of Public Works Jambi Province Government Tanjun Jabun Timur Government Jambi University Sriwijaya University
Jambi
38 Avoidance of Deforestation by Creation of Alternative Agricultural Lands with Coal Ash Products
REDD REDD/REDD+ Chugai Technos Corporation
39 Geothermal projects under the JCM scheme in Indonesia: Methodological aspects
Renewable Energy
Energy Industries - Renewable Sources
Mitsubishi Research Institute (MRI)
National Council on Climate Change of Indonesia 14
2012-2013
No FS Title Sector Sectoral Scope Study Entity Indonesian
Partner Locatio
n
40 Promoting Rehabilitation of Hydro Power Plants to Mitigate Climate Change in Indonesia
Renewable Energy Energy Industries - Renewable Sources
Toshiba and Recycle One PLN PJB West Java
41 Feasibility Study on Promotion of Technical Standards for Wind Power Generation utilizing EMS in Indonesia
Renewable Energy Energy Industries - Renewable Sources
Mitsubishi Research Institute and MUFJ
BPPT Yogyakarta
42 Small-scale Hydropower Projects Renewable Energy Energy Industries - Renewable Sources
IDI Local developers North Sumatera
43 The Introduction of Thin-Film Mega-Solar Power Plant in Indonesia Renewable Energy Energy Industries - Renewable Sources
SHARP Corp PLN Lombok
44 Solar Diesel Hybrid to Stabilize PV Power Generation Renewable Energy Energy Industries - Renewable Sources
Hitachi Zosen PLN North Sumatera
45 Biodiesel Fuel (BDF) Project in Indonesia Renewable Energy Energy Industries - Renewable Sources
Mitsubishi UFJ Research and Consulting (MURC) and Komatsu
Adaro Energy tbk., United Tractors tbk.
Kalimantan
46 Promotion of electrification to non electrified areas in Indonesia by renewable energy hybrid system - Introducing Hybrid renewable energy system to BTS in un-electrified reas -
Renewable Energy Energy Industries - Renewable Sources
E&E Solutions, Inc.
47 Biomass Power Generation Project in the State-owned Palm Oil Mills Renewable Energy Energy Industries - Renewable Sources
Shimizu Corporation PTPN III North Sumatra
48 Applying RENKEI Control Technologies in Utility Providing Facilities through Software Package
Energy Efficiency Energy demand Azbil Java
49 Deployment of Energy Efficiency Technology through Operation Optimization at Plants
Energy Efficiency Manufacturing industries Yokogawa Pertamina Java
50 Pre-Feasibility Study for Identification of Replacement of Existing Power Plants under the JCM scheme
Energy Efficiency Energy Industries - Non-Renewable Sources
Japan Coal Energy Center (JCOAL) Mizuho Corporate Bank, Ltd.
Java
51 MRV Methodology Application Study for Introduction of Inverters to Aluminum Smelting Plant
Energy Efficiency Energy demand NTT Data
PT. Molten Aluminum Molten Producer Indonesia PT Fuji Electric Indonesia
52 Program organization research of Low-rank coal fuel waste heat drying project in a cement factory
Energy Efficiency Manufacturing industries
Ube Industries, Ube Machinery Corporation, Mizuho Information & Research Institute
PT Semen Padang West Sumatera
53 N2O Emissions reduction by the diffusion of Coated fertilizers for agricultural soils
Agriculture Agriculture JCAM AGRI, Marubeni PT ASTRA AGRO LESTARI TBK
Riau
54 Study for Project Development and Organization on Eco-Shipping Project for Coastal Cement Tanker In Indonesia
Transportation Transport
Ube Shipping & Logistics, Ltd. Japan Weather Association National Maritime Research Institute
PT. IBT Indonesian sea area
55 Promotion of Modal Shift from Road-based Transport to Mass Rapid Transit (MRT) System
Transportation Transport MITSUBISHI RESEARCH INSTITUTE,INC.
PT. MRT Jakarta DKI Jakarta
56 Indonesia Sumatera SNG Project Follow Up FS Carbon Capture and Storage and SNG
Energy Industries - Renewable Sources
Mitsubishi Heavy Industries ESDM South Sumatera
57 Progress of Joint Feasibility Study for CO2-CCS Project in Indonesia Carbon Capture and Storage and SNG
Carbon Capture and Storage Marubeni Arabian Oil
National Council on Climate Change of Indonesia 15
2013-2014 No FS Title Sector Sectoral Scope Study Entity Indonesian Partner Location
58 DENSO Fleet Management System “Driving Partner”
Transportation Transport DENSO Jakarta
59 Contribution for GHG Reduction through Azbil Software Package
Energy Efficiency Energy demand Azbil Pertamina Cilacap
60 Financial Scheme Development Project for Promoting Energy Saving in Jakarta, Indonesia
Energy Efficiency Energy demand Mitsubishi UFJ Morgan Stanley Securities
Badan Lingkungan Hidup Jakarta
61
Project for leapfrog development in waste and wastewater management sector for North Sumatera province in Indonesia in 2013FY
Waste Handling and Disposal
Waste Handling and Disposal
Mitsubishi UFJ Research and Consulting (MURC)
North Sumatera
62 Sustainable Water Management for Rice-Farming Peatland Mitigation in Indonesia
REDD REDD/REDD+ Shimizu
Ministry of Public Works, Ministry of Agriculture, Jambi Province Government, Tanjun Jabun Timur Government, Jambi University, Sriwijaya University, Tokyo University Deltares
Jambi
63 Environmentally Sustainable Cities FS using JCM
Various
IGES, NTT Data Institute, Almec VPI Corp., Hitachi Zosen Corp., Amita Corp., Matsuo Sekkei Corp.
PDAM, SIER, Dinas Pertamanan, etc
Surabaya
64 CCS CO2-EOR in Indonesia Carbon Capture and Storage and SNG
Carbon Capture and Storage
Marubeni Pertamina
65 Energy Savings at Convenience Stores Energy Efficiency Energy demand Lawson Jakarta, Bandung
66 Thin-Film Mega Solar Power Plant in Indonesia_Latest Report of Demonstration Project
Renewable Energy Energy Industries - Renewable Sources
SHARP Corp PT. PLN (Persero) Lombok
67 Energy Saving for Air-conditioning and Process Cooling at Textile Factory
Energy Efficiency Manufacturing industries
Ebara Refrigeration Equipment & Systems
PT. Primatexco, PT. Ebara Indonesia
Central Java
68 Regenerative Bruners to Aluminium Melting Furnaces at Automotive Components Manufacturer
Energy Efficiency Manufacturing industries
Toyotsu Machinery Corporation
PT. Yamaha Motor Parts Manufacturing Indonesia, PT. Kyowa Indonesia
Jakarta, West Java
69 Improvement of REDD+ Implementation using IC Technology
REDD+ REDD/REDD+ Mitsubishi Research Institute and NEC
East Kalimantan
70 Solar Diesel Hybrid to Stabilize PV Power Generation in the Nias Island
Renewable Energy Energy Industries - Renewable Sources
Hitachi Zosen PT. PLN (Persero) North Sumatera
National Council on Climate Change of Indonesia 16
Summary based on JCM Sectoral Scope Sectoral Scope 2010-2011 2011-2012 2012-2013 2013-2014 Total
1 Energy industries (renewable- / non-renewable
sources); 3 9 11 2 25
2 Energy distribution; 1 1 3 Energy demand; 1 1 2 3 7 4 Manufacturing industries; 2 2 2 6 5 Chemical industry; 6 Construction; 7 Transport; 2 2 1 5 8 Mining/Mineral production; 9 Metal production;
10 Fugitive emissions from fuels (solid, oil and
gas);
11 Fugitive emissions from production and
consumption of halocarbons and sulphur
hexafluoride;
12 Solvents use;
13 Waste handling and disposal; 1 1 2 14 REDD and REDD+ 1 6 7 2 16
15 Agriculture. 1 1 1 0 3
Program 1
Carbon Capture and Storage 1 1 1 1 4 8 23 26 12 70
National Council on Climate Change of Indonesia 17
Summary based on JCM Sectoral Scope
Sectoral Scope Total
1 Energy industries - renewable sources 21
Energy industries - non-renewable sources 4
2 Energy distribution; 1
3 Energy demand; 7 4 Manufacturing industries; 6 5 Chemical industry; - 6 Construction; - 7 Transport; 5 8 Mining/Mineral production; -
9 Metal production; -
10 Fugitive emissions from fuels (solid, oil and gas); -
11 Fugitive emissions from production and consumption of halocarbons and sulphur
hexafluoride; -
12 Solvents use; - 13 Waste handling and disposal; 2 14 REDD and REDD+ 16 15 Agriculture. 3
Carbon Capture and Storage and SNG 4
Program Sustainable City (program) 1 Total 70